In the new issue of Regulation, economist Pierre Lemieux argues that the recent oil price decline is at least partly the result of increased supply from the extraction of shale oil. The increased supply allows the economy to produce more goods, which benefits some people, if not all of them. Thus, contrary to some commentary in the press, cheaper oil prices cannot harm the economy as a whole.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

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Tag: limited government

Is Tea Party conservatism a help or a hazard for Republicans seeking a return to power?

My response:

Let’s start with some clarity: “Tea Party conservatism” stands for several things, but it is not the caricature one often finds in the mainstream media, to say nothing of the left wing blogs. It is a movement with deep historical roots, drawing its name and inspiration from the Boston Tea Party of 1773. As with that event, taxes brought it to the fore – on Tax Day, April 15. But taxes are simply the most obvious manifestation of modern government run amok, insinuating itself into every corner of life. Trillions of dollars of debt for our children, out-of-control government budgets, massive interventions in private affairs – the list of wrongs is endless, and under Obama has exploded. He stands for nothing if not for making us all dependent on the government he has promised us. That’s not America. That’s a foreign vision, which over the centuries countless millions have fled, searching for freedom.

To be sure, the Tea Party movement has its fringe elements, as did the revolt against British tyranny, which the establishment of its day disparaged. So too does the Obama administration, some of whom have already resigned. The basic question, however, is what does the movement stand for? What are its principles? And on that, the contrast with the Obama vision is stark: However much confusion there might be on specific issues, which is to be expected, the broad principles are clear. The Tea Party movement stands for limited constitutional government. At its rallies, on hand-written sign after sign, that was the message repeatedly seen. These are ordinary Americans – Republicans, Independents, and even Democrats – who want simply to be left alone to plan and live their own lives. They don’t want “community organizers” to help empower them to get more from government.

But they do need to be organized to bring that about – to get government off their backs. And the Republican Party should be the natural vehicle toward that end – the party, after all, that was formed to get government off the backs of several million slaves. But today’s Republican Party is a mixed lot: Some understand those principles; but others, as in the NY 23 race, are all but indistinguishable from their counterparts in the party of Obama. The problem in NY 23 was not that a third party entered the race. Rather, the party establishment botched things from the beginning, by picking a nominee who properly belonged in the Democratic Party, as her pathetic last-minute endorsement indicated, and that’s why a third party entered the race – with a novice of a nominee who nearly won despite the odds against him.

The question, therefore, is not whetherTea Party conservatism is a help or a hazard for Republicans seeking a return to power? To the contrary, it is whether the Republican Party is a help or a hindrance to the Tea Party movement? It will be a help only if it returns to its roots. The mainstream media, overwhelmingly of the Democratic persuasion, will continue to push Republicans to be “moderate,” of course – meaning “Democrat Lite” – to which the proper response is: Why would voters go for that when they can get the real thing on the Democratic line? If Tuesday’s returns showed anything, it is that Independents, a truly mixed lot, are up for grabs; but at the same time, they are looking for leaders who promise not simply to “solve problems” but to do so in a way that respects our traditions of individual liberty, free markets, and limited government. When Republican candidates stand clearly and firmly for those principles, they stand a far better chance of being elected than when they temporize. That is the lesson that Republicans must grasp – and not forget – if they are to return to power.

Michael Tanner and Michael Cannon are working nonstop to derail government-run health care, but they better figure out how to work more than 24 hours per day, because if they fail, it is very likely that politicians will then look for a new revenue source to finance all the new spending that inevitably will follow. Unfortunately, that means a value-added tax (VAT) will be high on the list. Indeed, the VAT recently has been discussed by powerful political figures and key Obama allies such as the Co-Chairman of his transition team and the Speaker of the House.

The VAT would be great news for the political insiders and beltway elite. A brand new source of revenue would mean more money for them to spend and a new set of loopholes to swap for campaign cash and lobbying fees. But as I explain in this new video from the Center for Freedom and Prosperity, the evidence from Europe unambiguously suggests that a VAT will dramatically increase the burden of government. That’s good for Washington, but bad for America.

Even if the politicians are unsuccessful in their campaign to take over the health care system, there will be a VAT fight at some point in the next few years. This will be a Armageddon moment for proponents of limited government. Defeating a VAT is not a sufficient condition for controlling the size of government, but it surely is a necessary condition.

Based on five criteria, James Pethokoukis of Reuters connects the dots and warns that President Obama is going to propose a value-added tax.

Does President Obama have a secret plan to raise taxes on middle-class Americans — and,well, pretty much everybody else — with a European-style, value-added tax? Actually, it’s not such a big secret. …Obama’s campaign promise to not raise taxes on households making less than $250,000 a year was always considered a joke here inside the Beltway. …Maybe it was a joke inside the campaign, too. Since being elected, Obama has raised cigarette taxes and has advocated raising healthcare taxes, energy and small business taxes, in addition to corporate taxes. What’s more, economic advisers like Larry Summers seem eager to get rid of all the Bush tax cuts, not just those on so-called wealthy Americans. And it’s also no secret that economists love the idea of a VAT. It promotes savings over consumption, and its hidden nature may mean it has less behavioral impact on taxpayers. …Liberals love the idea of a VAT because it’s, well, so European — also because it does raise tons of revenue to expand government. And that is what Obama wants: more revenue to pay for bigger government. Is a VAT better than the soak-the-rich approach favored by Democrats such as Nancy Pelosi and Charlie Rangel? Sure. Of course, the concern is that a VAT would be in addition to new soak-the-rich taxes.

While the timing is unclear, his prediction is correct. The politicians in Washington want much bigger government, but they know that it will be difficult to achieve that goal without a big new source of revenue. The VAT would be perfect from their perspective. It is a form of national sales tax, but would be hidden in the price of products and therefore easy to increase. Moreover, every time they increase the VAT, they would use that as an excuse to raise income tax rates for “distributional fairness.” It is no exaggeration to say that the VAT is the biggest fiscal threat to the cause of limited government.

One final point about the column. Economists don’t love the VAT, per se, but they do view it as being less destructive - per dollar raised - than the income tax. But less destructive is still destructive. And since the VAT would be in addition to the taxes we have now (and actually create the conditions for higher income tax rates), its enactment would create a lose-lose situation for taxpayers.

In 1975, of 72 countries, Chile was No 71. How did this happen? The explanation lies in what I call the “Chilean Revolution,” because it was as important and transformative to my country as the celebrated American Revolution that gave birth to the United States.

The exceptional political circumstances of this period have obscured the fact that from 1975 to 1989 a true revolution took place in Chile, involving a radical, comprehensive, and sustained move toward economic and political freedom (from a starting point where there was neither one nor the other). This revolution not only doubled Chile’s historic rate of economic growth (to an average of 7% a year, 84-98), drastically reduced poverty (from 45% to 15%), and introduced several radical libertarian reforms that set the country on a path toward rapid development; but it also brought democracy, restored limited government, and established the rule of law.

In 1998, The Los Angeles Times described the importance of the Chilean Revolution to the world:

In a sense, it all began in Chile. In the early 1970s, Chile was one of the first economies in the developing world to test such concepts as deregulation of industries, privatization of state companies, freeing of prices from government control, and opening of the home market to imports. In 1981, Chile privatized its social-security system. Many of those ideas ultimately spread throughout Latin America and to the rest of the world. They are behind the reformation of Eastern Europe and the states of the former Soviet Union today… which demonstrates, once again, the awesome power of ideas.

The role and achievements of Chile’s team of classical liberal economists is well known. They were the ones who in 1975, once the quasi-civil war was over, decided to carry out a principled, “friendly takeover” of the military government that had arisen from the breakdown of democracy in 1973 (here is my essay, published in “Society”, on that drama). Much less well-known, however, is that they were also the foremost proponents of a gradual and constitutional return to a limited democracy.

In fact, on August 8, 1980, a new Constitution, containing both a bill of rights and a timeline for the restoration of full political freedom, was proposed and approved in a referendum. In the period 1981-1989, what Fareed Zakaria has called the “institutions of liberty” were created—an independent Central Bank, a Constitutional Court, private television and universities, voting registration laws, etc—since they were crucial for having not only elections but a democracy at the service of freedom. Then on March 11, 1990, an extraordinary event happened: the governing military Junta surrendered its power to a democratically elected government in strict accordance to the 1980 Constitution (here is my note on the restoration of democracy in Chile).

Since 1990, Chile has had four moderate center-left governments and, despite minor setbacks on tax, labor and regulation policies, the essence of the free-market reforms are still intact. The 1980 Constitution is the law of the land, and has been amended by consensual agreements among all parties represented in Congress. Not only is Chile now at the top of rankings on free trade (number 3 in the world after Hong Kong and Singapore) and transparency (less corruption that in most western European countries), but it is expected to be a developed country by 2018, the first in Latin America.

Nobel Laureate Friedrich Hayek proved, again, to have been a visionary when he stated in 1981: “Chile is now a great success. The world shall come to regard the recovery of Chile as one of the great economic miracles of our time.”

My former colleague Dave Weigel makes the excellent point that the supposed explosion of “Czars” under this administration is, in significant part, a function of journalists trying to make the same old “deputy undersecretary” sound sexier. Which is a shame, since it means that the pernicious and the benign get lumped together under the same sensationalist label – one whose public effect is to normalize the idea of unaccountable individuals within the executive branch given sweeping powers to solve specific problems, whether or not that picture is accurate.

I don’t know how much it can be attributed to the Czarmania, but I’m especially puzzled by the apparent emergence of legal scholar and prospective OIRA Adminstrator Cass Sunstein as the new hot bogeyman for conservatives. The Office of Information and Regulatory Affairs, which Sunstein’s been tapped to head, was created in 1980 and is precisely the sort of agency conservatives should love – tasked with catching inefficient and excessively burdensome regulations before they go into effect. It has, unsurprisingly, been most active under conservative presidents, and is one of the few offices where fans of limited government should want a vigorous, influential, and intellectually formidable director at the helm.

Now, Cass Sunstein is not somebody I agree with on a great number of things. On the day he’s tapped for a seat on the Supreme Court bench, I’ll break out in hives. But it’s awfully hard to imagine any realistic alternative – anyone Obama might actually have appointed – who would be better in the OIRA post from a limited government perspective. (I considered some of the specific concerns being raised about Sunstein back in the spring and found that they ranged from exaggerated to simply mendacious.) That’s one reason hardcore progressives have, in fact, been freaking out over his nomination. They must be pinching themselves now that it seems Glenn Beck is out to do their work for them. Say what you will about the tenets of “libertarian paternalism,” but at least it’s an ethos that would demand a far lighter touch on markets than the unreconstructed technocracy of your average regulator.

Last week’s Senate Judiciary Committee hearings (video at the link) on the proposed federal hate crimes bill showed the dark underbelly of the Senate. The road to undermining the rule of law is being paved with the best of intentions and casual disregard (if not outright hostility) for the principles of limited government and equality under the law.

The bill federalizes violent acts against victims by reason of their actual or perceived race, color, religion, national origin, gender, sexual orientation, gender identity, or disability.

Never mind that these acts are already prosecuted by the states, and that violent crimes of this nature are universally perceived as an affront to justice. Matthew Shepard, the gay man brutally killed in Wyoming, has provided one of the rallying cries for passage of this legislation. His killers both received two consecutive life sentences from a state court. James Byrd, Jr., the African-American man dragged to death behind a truck in Texas, is cited as another reason to pass the law. His killers received death sentences or life imprisonment.

The federal government would also be authorized to prosecute whenever “the verdict or sentence obtained pursuant to State charges left demonstratively unvindicated the Federal interest in eradicating bias-motivated violence.” While this doesn’t violate the letter of the Supreme Court’s Double Jeopardy jurisprudence (the federal and state governments are considered separate sovereigns) it certainly violates its spirit.

The hearing video shows a complete disregard for limitations on federal power. Senator Ben Cardin (D-MD) claims that we need a “uniform” law across the states (82 minute mark). This claim ignores the fact that 45 states have their own hate crime laws and that violence against others is universally unlawful and routinely prosecuted. It also disregards the fact that general police powers belong to the states, not to the federal government.

Senator Charles Schumer (D-NY) then makes a brief appearance (89 minute mark) to slander opponents of the legislation - how could anyone oppose legislation with such a noble goal? He claims that this is tantamount to saying that it is acceptable to harm people because you do not like who they are.

The problem is that a broad array of actions are implicated as “hate crimes.” Virtually all rapes seem to fall under the new law - it is hard to see how the choice of a rape victim would not implicate their sex. Gail Heriot, a member of the United States Commission on Civil Rights (which came out 6-2 against this legislation), testified that when she consulted with Department of Justice attorneys in previous attempts to pass this legislation, they didn’t seem fazed by this prospect.

Don’t expect the application of this legislation to be the rare and exceptional prosecution that Attorney General Holder promises in his testimony. Janet Cohen testified that her upbringing in a racially divided America decades ago justifies passage of this law. She also proposes that prosecutions with the new law will be “wise” on account of Holder’s “brilliance and integrity.”

And to think, we were once a nation of laws, not of men.

This legislation doesn’t promote the rule of law, it undermines it. Prosecutions that favor one group of victims over another mark the destruction of equality before the law.

The worst facet of the legislation is its counterproductive nature. A real true believer, a hardcore racist or homophobe, would want to be prosecuted under a statute that criminalizes his motives. Prosecution under a murder statute makes him a common criminal; prosecution for murdering someone given special status by the government makes him a martyr for his cause and incites those motivated by his brand of hatred and animus.

This is nothing new. The Animal Enterprise Protection Act (AEPA) criminalized harassment, vandalism and violence against companies that test their products on animals. When seven activists from Stop Huntingdon Animal Cruelty tried to intimidate people associated with Huntingdon Life Sciences, a company engaged in animal testing, they weren’t just prosecuted for stalking. They were prosecuted for conspiracy to violate a federal statute enacted at the behest of their target industry. This made martyrs of the “SHAC 7” and highlighted the undue influence that an industry can exert over government. The focus is now on the propriety of the law used to prosecute someone, not the fact that they unlawfully stalked people engaged in lawful commercial activity.

You don’t defeat politically motivated violence by politicizing the laws used to prosecute it.

Murder is always murder most foul. We criminalize rape, assault, vandalism, and criminal threats because they harm a citizen - not a super-citizen held in some special regard by the government.